Jobs Report Keeps Fed on Hold for Now

The jobs market isn’t making it any easier for the Federal Reserve to make decisions about its $85 billion monthly bond-buying programs. Here are a few quick takeaways on what this report likely means for the Fed:

–This assures that the Fed won’t act at its Oct. 29-30 policy meeting. Fed officials were hoping a few months ago that the economy would be showing enough strength by now to warrant pulling back on their bond-buying program. The economy isn’t meeting the test. Payroll employment growth is mediocre. It has averaged 143,000 per month over the past three months, a slowdown from 224,000 over a three month period when the Fed’s “taper talk” started in April. The jobless rate is coming down. At 7.2% in September it was down almost a full percentage point from when the Fed started the latest bond-buying program. But it is has been coming down for the wrong reasons … people dropping out of the labor force. More on that in a moment.